If the flight shows as upgrade available then yes you can lock that in advance with the 20k miles to first class. It’s not for E+. This means United has allowed space in a special category called PZ (you’ll read a lot of it here).
if there is no space you are on the waitlist: I think it takes them but you get it back if no upgrade. Be careful if there are multiple flights on the trip because it will take them even if one say one short flight clears.
what is happening here is you are paying for the upgrade with an “instrument” in this case miles but there are other types called Plus Points that 1K and GS get /can gift.
the waitlist is the same as the complimentary one but you are now much higher up the list than you were before and have a much better chance of clearing to first.